Dr Anil Chinnabhandar, Senior VP – Retail planning & Supply Chain, Landmark Group shares the end-user perspective on the impact of Covid-19 on the logistics and supply chain industry and what should the immediate future actions required, how to deal with the customers’ demand and seeks government support too.
Covid is having an unforeseen, unexpected and unthinkable effect on the industry. Typically businesses always have contingency plans or business continuity plans (BCP) during sudden changes, accidental situations or natural disasters. But nobody predicted nor was prepared for such a worldwide calamity in their wildest dreams!
Every part of the industry has been forced to shutdown. Though essential services had to be operational as normal, even those services have become ‘mercy activities’ or part of ‘humanitarian tasks’, which is shocking. Flights, Trains and Trucks are grounded! Places shut? But most affected is the Logistics community. One can never remember such dead silence even during wars? Bosses are unable to deal with zero cash flows; staff and agents are struggling to survive with lower reserves and worst uncertainty; drivers and contract/casual laborers scouting for the day’s meal!
In the middle of all these, what’s truly disappointing is the absence of administrative leadership to govern and help the community at large! essential services staff and supplies are facing bureaucracy and harassment though risking their own health and family safety?
As far as the immediate future is concerned, will immediately look at Optimising Inventory holding; staff will be trained to commence productive operations as soon as the lockdown is lifted. All non-essential works including new capex will be put on-hold. As the business will take 6-12 months to recover, we need to move the cost structures back to 2017-18. Sustainability and survival measures would be paramount. Will ensure to retain talent and look after them even during tough times.
Customers/Consumers demand needs to be catered to with immediate attention but at optimal cost structure, meaning no promotions and no discounts! Over the next quarters will stabilize the business and move towards growth trajectory. We will have to jointly work with partners to somehow limit damages to both businesses and employees in these difficult times.
Industry should push with governments to recognise Logistics including warehousing an integral part of essential services. Stricter safety measures can be imposed on industry to assure the health and safety of staff. Online business and Omni Retail channels should be left to operate even during lockdowns with government protection. Government should allow Retailers to move and stock their stores during nights avoiding peak loads during daytime. Customer expectations should be reset with realistic and meaningful lead times, delivery timelines and mutually beneficial service levels.
The best takeaway or lesson from COVID-19 is to lead a simple and content life rather than chasing unsatisfiable and mirage-like flashy life which is unsustainable from environmental, ethical and social obligation point of view.